Chinese Super League clubs will only be allowed to feature three non-Chinese players per game in their next season which begins in March.
A rule change has reduced the number of foreigners allowed in a move which could slow down the wave of big-money signings from Europe.
Already, Chelsea striker Diego Costa has been linked with a move to China that would be worth £30m a year.
Reports from China quote an official statement as indicating that new measures will address “irrational investments.’’
The News Agency of Nigeria, NAN, reports that, previously, the rule was “4+1” — four foreigners of any nationality plus one Asian in a match day squad.
Teams will now also be required to name two under-23 Chinese players in their match day squads, with at least one in the starting XI.
Also, the Chinese Football Association is looking into “signature fees and other illegal activities’’ in recent transfers.
Chelsea midfielders Oscar and Mikel Obi have already moved to China this month.
Former Manchester United and Manchester City forward, Carlos Tevez, reportedly became the world’s highest-paid player when he joined Shanghai Shenhua last month.
Shenhua would be one club hit by the new rules as they have six non-Chinese players in their squad.
These include Tevez, another former Chelsea forward Demba Ba and former Newcastle United striker Obafemi Martins.
Costa has been linked with a move to Tianjin Quanjian, who signed Belgium midfielder Axel Witsel for a salary of over £15 million (about N7.5 billion) a year this month.